Top four indicators of ethical risk in the workplace

Workplace integrity entails more than simply following the rules, it requires a top-to-bottom commitment to treating others with respect and dealing with those inside and outside of an organization honestly and fairly.

Both studies focus on four key metrics drawn from NBES research and numerous multi-national ECI surveys to measure an organization’s and/or its employees risk of ethical workplace violations:

Pressure to compromise organizational standards — such pressure is a leading indicator of the potential for future workplace misconduct. In the 2013 NBES, an average of 73 percent of employees felt pressure to evade ethical standards while also witnessing workplace misconduct. Comparatively, an average of only 17 percent of those without such pressure observed misconduct in their business.

Observed misconduct — naturally the most fundamental indicator of whether employees follow the rules and live out a firm’s core values. While media stories provide numerous examples of issues like bribery and fraud, the 2013 NBES found that lying to customers, co-workers, vendors or the public and abusive behavior were the most common ethical misconduct in day-to-day workplace interactions. According to the data, a significant amount of misconduct occurs on a continuous basis and 12 percent is pervasive.

Reporting of observed misconduct — reporting allows leaders to address and fix ethical workplace issues since management cannot address problems it does not know exist. Consequently, the availability of anonymous and/or confidential reporting mechanisms are an important component of promoting an ethical workplace. Management should clearly convey the availability of such reporting methods, encourage their use and ensure tipsters that they will be protected if they make a report.

Retaliation against reporters — can take the form of such things as the silent treatment, verbal harassment, demotions, undesirable assignments or even violence. Both actual and perceived retaliation erodes trust, discourages reporting and makes it harder for organizations to identify and root out bad behavior, thus allowing it to fester and spread.

2016 Global Business Ethics Study

The 2016 GBES findings show:

Employees in the private sector employed by multinational companies are more likely to both feel pressure to compromise standards, as well as to observe misconduct than employees in companies with a presence in only one country.

The majority of bribery in the private sector involves top managers (23%) and middle managers (32%)

Brazil, India and Russia had the most respondents reporting pressure to compromise standards and observing misconduct than those in the 10 other countries included in the survey

Tone at the top crucial for ethical workplace culture

A significant majority of misconduct is attributable to those with some level of management responsibility. As those responsible for establishing the tone for everyone else, misbehavior by management does not bode well for an ethical culture throughout the rest of an organization. Fostering an ethical culture requires that management lead through its actions, reward good behavior and punish unethical conduct. Employees who witness managers actively following the organization’s code of ethics are more likely to report misconduct they observe in the workplace, as well as be more satisfied with their firm’s response to reported misconduct.